“Too much bureaucracy, the high energy prices and stubborn economic flakes are heavily burdened by the economy,” says the Institute of German Economy (IW). For this reason, there were significant increases in bankruptcy reports last year. However, the number of companies that have to register bankruptcy will also increase in 2025. By the end of the year, around 25,800 companies in Germany should “slide into a bankruptcy”. This increases the number of insolvent companies for the fourth time in a row. The number would even double compared to 2021.
The events of the past few years in particular present themselves as a turning point for insolvency developments: Before the pandemic, the number of insolvent companies declined, while a low point was reached in the course of the pandemic, since the obligation to apply was suspended. With the Russian attack on Ukraine, prices, not least the energy prices, “and the following years of recession are strongly increasing the companies,” said the IW. But Germany as a business location is also becoming increasingly unattractive. While high regulations and bureaucracy prevent investments prevented, the bankruptcies continue to drive up. Compared to countries like the USA, there is only a rather small number of founders in Germany, according to IW, a shortage of skilled workers and high requirements would prevent companies from taking the step.
It is all the more important that politics founders do not put stones in their way, but promote innovations. “The new federal government has to create the U-turn, boost the economy again and make Germany attractive again as a business location,” says study author and IW insolvency expert Klaus-Heiner Röhl. “The excessive bureaucracy, a dilapidated infrastructure and the shortage of skilled workers inhibit the new start -ups and continue to drive the bankruptcies upwards. That has to change as soon as possible.”